Vietnam’s large stockpile of coffee beans is diminishing, a development that is expected to push global coffee prices even higher.
Traders surveyed by Bloomberg predict that stockpiles will be cut in half by the end of September compared to the same time last year. Output by Vietnam, the world’s largest exporter of robusta and second-largest coffee grower, is anticipated to experience a continued decline in 2022-23.
Robusta, which is used by instant coffee companies such as Nestle and in espresso blends, is making a comeback. The variety, which is typically less expensive than arabica, is in high demand as people seek alternatives to minimize the effects of inflation.
After drought and frost reduced Brazilian production, the global coffee market is facing one of the largest deficits in recent years.
According to reports, Colombia is struggling with crop-damaging rains, while Honduras, Guatemala, and Nicaragua are running low on supplies. Next-season crops in Costa Rica and Uganda are also stressed due to drought.
Meanwhile, a drop in the planting area for more profitable fruit trees and a rise in fertilizer prices will probably affect production in 2022-23, according to Do Ha Nam, Intimex Group’s chairman, and the Vietnam Coffee and Cocoa Association’s deputy head.